September/October 1995
The growing cry for quality assurance from scrap consumers could make it essential for recyclers to achieve ISO 9000 certification. Here’s a look at how—and why—to apply these international quality standards to your operations.
By Scott J. Horne
Scott J. Horne is director of state and local programs for the Institute of Scrap Recycling Industries.
While most recyclers have probably heard of IS0 9000, it's a good bet that few could really describe what these international quality assurance standards are all about. And this is one instance where ignorance is definitely not bliss.
More and more, IS0 9000 is becoming synonymous with quality in all kinds of manufacturing industries, pushing a growing number of companies to work to become certified under these standards. At the start of 1995, in fact, an estimated 5,000 firms had achieved IS0 9000 registration in the United States , and that figure is rising rapidly as the need for certification trickles down to lower levels in the manufacturing and distribution chain, from consumers to suppliers to suppliers' suppliers and so on.
Thus ignorance of IS0 9000 could be a serious impediment to the future viability of some recycling firms, both domestically and internationally. Conversely, understanding the standards and pursuing IS0 9000 certification could help scrap companies—both small and large—not only maintain their current business status, but also open up new opportunities for cost savings as well as sales.
Intro to IS0
The first thing to understand about the IS0 9000 standards is that they are designed to eliminate the need for consumers to conduct periodic quality audits of their suppliers. In other words, the standards give consumers confidence that their suppliers will say what they do and do what they say.
The driving force behind the standards is the International Organization for Standardization, a Geneva-based group that encompasses the national standards bodies from 91 countries, with the United States being represented on IS0 9000 issues by the American National Standards Institute (ANSI). Each ISO -group country has an accreditation agency that certifies businesses to the standard—in the United States it's the Registrar Accreditation Board, commonly referred to as the RAB, which is an arm of both ANSI and the American Society for Quality Control—and each country's accreditation agency is generally accepted by the others.
Another fundamental point to realize is that IS0 9000 is actually the catchall name for five related standards numbered IS0 9000-9004, with the actual quality standards being IS0 9001-9003. IS0 9000, meanwhile, defies basic quality concepts and offers guidance to help companies decide which standard is most applicable to their operations, while IS0 9004 provides guidance on how to develop and implement a quality system and establish an internal auditing program.
Of the three quality standards, IS0 9001 is the most comprehensive, covering quality assurance in design, development, production, installation, and servicing. ISO 9002 is similar except for the design and development aspects, whileISO 9003, which pertains to final inspection and testing, is the least comprehensive standard and is more applicable to distribution operations than manufacturing facilities.
Of these three, ISO 9002 is most likely tot be the proper category for scrap recycling companies to pursue, though ISO 9001 could be appropriate for those firms that have specialized ways of processing of shipping.
Beyond these basics, scrap recyclers should know about four important aspects of ISO 9000:
The standards do not guarantee the quality of a company’s end product. Instead, they certify a company’s quality systems—by bringing consistency and objectivity to a suppliers quality assurance procedures and assuring that the supplier has the capability to make a product to design specifications. This helps explain why ISO 9000-certified companies are only allowed to apply for their certification symbol to their letterhead, ads, and so forth, but not directly to their products.
The standards do not specifically define a quality system that all companies must follow. Rather, each firm must develop its own quality assurance processes and systems that work with its particular operations and industry.
Certification is site-specific, so each operating unit of a company generally must be certified individually. (In some limited circumstances, multi facility operations within close proximity that are interrelated in their production processes may be certifies jointly.)
ISO 9000 certification is not a one-time achievement but rather an ongoing effort aimed at continuous improvement in a company’s quality systems. Thus even after a company is audited and certified, it must be spot-checked approximately every six months and reaudited about every three years. Failure to adhere to the standards can result in certification being revoked during any recertification audit.
Why Do It?
At this point, you’re probably asking, “Why should we become ISO 9000 certified? Is it really that important?”
In short, yes. For one reason, certification is quickly becoming a prerequisite in both domestic and international trade. For another, adherence to ISO 9000 principles has been documented to help lower operating and administrative costs, and it helps ensure a commitment to continuous quality improvement. Also, companies can use ISO certification as a marketing tool to give them an edge over their competitors and expand their business based on their augmented quality reputation.
Perhaps most important, consumers that are ISO 9000 certified, or seeking certification, are asking—and in some cases, demanding—that their suppliers also become certified. For instance, foundries and tier I suppliers to the automotive industry are putting pressure on some of their suppliers to consider becoming IS0 9000 certified. The tier I suppliers are pushing the issue because the Big Three domestic automakers are requiring them to be certified to their QS 9000 standard, which is based on IS0 9000 but is more demanding in many respects. And one QS 9000 requirement is for tier I suppliers to require their suppliers—including scrap recyclers—to become certified to IS0 9000 or QS 9000 standards. Achieving such certification, therefore, could be the deciding factor in whether a recycler is able to continue doing business with certain consumers.
“OK,” you concede, “I can see the sense behind ISO 9000 certification, but how much time and effort will it take, and how much will it cost?”
On the time issue, ISO 9000 certification can take 12 to 24 months or more to achieve, even in companies with well-established quality programs.
Regarding cost, ISO 9000 certification isn’t cheap, but the good news is that the cost has been steadily declining in recent years and is expected to continue to drop as more qualified auditors and registers become available. The exact cost will vary depending on company size, with smaller firms paying less. For example, one register recently estimated that for companies with 15 to 20 employees, the average cost of registration would be $11,000; with 50 employees about $15,000; with 100 employees, about 19,000; and with 200 employees, about $22,000.
It should be noted that these figures represent only the cost of registration. The overall cost of achieving ISO 9000 certification (including the registration fee) is generally three to five times the registration cost, taking into account consulting fees, training costs, and program implementation and documentation costs.
While these costs may appear imposing at first, many firms that have achieved certification have found they quickly recovered their investment through operating efficiencies and increased sales based on their enhanced quality image.
On the Road to Certification
"Sounds like something we'd like to explore," you might be saying by now. “So how do we get started?”
Before pursuing IS0 9000 certification, you must make sure there's a commitment from your company's top management to invest the time, money, and effort needed to reach that goal, as well as be open to sometimes dramatic change. Simply throwing money at the project won't cut it. Without the commitment of top management, don't even start the program.
Setting up the Program. Once you've got the necessary management commitment, you can begin your IS0 9000 program by establishing a steering committee composed of your company’s top managers, as well as representatives from middle management and production employees. Make sure that all departments and divisions within the company—such as ferrous, nonferrous, paper, purchasing, traffic, quality assurance, and so forth—are represented. Every project needs a leader, so select an employee to serve as ISO project manager. It could be your company’s quality assurance manager (if you already have one) and probably shouldn’t be your firm’s CEO, since a chief executive can’t, in most cases, be easily involved in all aspects of the project or bring the most objectivity to it.
To help ensure the success of the program, members of the steering committee—and especially the project manager—should learn as much as possible about the ISO standards and procedures by attending at least a full-day seminar on the topic. (A number of private organizations offer such courses.) In addition, all but the smallest companies should have at least two employees trained as qualified internal auditors to conduct regular checks of the firm’s quality systems, and larger firms can have as many as 18 to 20. Once these positions have been filled and some initial training has been conducted, you should be ready to perform an initial self-audit, which can enable you to establish a baseline level of quality from which to measure your progress, honestly assess what you will have to do to meet the standards, and perhaps, inspire some new efficiencies.
Consultant Considerations. In addition to relying on your own staff, you may want to hire consultants to help with your ISO 9000 project, particularly to assist you in areas where you’re weak, less than impartial, or simply not qualified.
But while consultants can be helpful, they can also be expensive. Furthermore, no outside professional can ever know your business and processes better than you and your staff, so hiring a consultant to do your initial audit or write your documentation can be not only costly, but also counterproductive.
One recommended approach is to use a consultant to help assess your starting position, offer guidance on how to create your documentation, train your staff ISO internal auditors, and conduct a pre-audit audit prior to your registration bid to let you know how you stand in your efforts.
If you decide to work with consultants, keep in mind that they should have some formal training and assessment experience with a quality registrar. Ideally, you should hire as your consultant an RAB-certified lead auditor. Keep in mind, however, that lead auditors can't serve as a consultant and registrar for the same client company.
Document Everything. Following the initial internal audit, which should reveal any weaknesses in your quality program, you should create an action plan that determines how you will address those weaknesses. This is just the first step in a long, detailed process of putting everything in writing. As with statistical process control and total quality management, IS0 9000 places great emphasis on documentation.
The first step in the documentation process is to create your quality policy manual, which is referred to as a level 1 document. Typically written by the steering committee, the policy manual should address each of the 18 to 20 topics in whichever standard you're pursuing-IS0 9001, 9002, or 9003. Most companies' policy statements are only one page long or less per topic, so your policy manual will likely be about 18 to 20 pages long.
Level 2 documents outline your company's standard operating procedures, and they are typically more detailed and will, therefore, be longer than level 1 documents. These procedures must cover each and every topic outlined in the standards, including such areas as purchasing and manufacturing.
Level 3 documents, which comprise work instructions and quality records, are extensively detailed instructions on how each manufacturing and administrative process is carried out. These documents should be issued and acted upon for at least three to six months prior to requesting your IS0 9000 audit so you can ensure they're working as planned.
As a word of advice, both level 2 and level 3 documents are generally best developed by the functional units to which they apply.
Once you've established your document system, it's essential to impose controls to keep your documents standardized and up-to-date. These controls include maintaining a master list of documents, accounting for all current copies of documents, and having a process for outdating them. In addition, your control system must identify who authorized documents, who may change them, who is in charge of distributing them, and who is in charge of maintaining them.
Changes should only be allowed to be made through standard procedures, and all copies must be updated at the same time. Furthermore, unauthorized copying of controlled documents should be strictly prohibited to maintain the integrity of the control system.
Getting Registered. IS0 9000 certification can only be granted by an accredited registrar firm, and it is up to you to choose the firm you wish to work with. It's a good idea to begin the process of selecting a registrar about the time you start your documentation efforts because it can take months for a firm to schedule your audit.
Registrar firms are authorized to audit only within certain industry sectors, so it's essential to make sure the registrar you choose is authorized to work with the scrap recycling industry. In general, you should also make sure the firm is accredited and recognized for IS0 9000 registrations by the registrar boards in those countries in which you do business. Then again, even if your registrar is not accredited in a particular country, it's possible that your registration will be recognized under the terms of a memorandum of understanding between your registrar and a registrar accredited in that country.
Since you will likely work with the registrar for a long time—for the initial audit as well as spot checks and reaudits—you should choose one you are comfortable working with. Choose wisely because you may also need to invest a significant amount of time educating your registrar about the scrap recycling industry, and you don't want to have to repeat that process with a new registrar.
In the audit process, it's the registrar's job to inspect your quality system and processes to verify that they are in keeping with IS0 9000 requirements. If your efforts are insufficient, the registrar will indicate where improvements are needed. If, on the other hand, your efforts pass muster, the registrar will give your firm its stamp of approval and officially register you as an IS0 9000 company.
Achieving certification is undeniably a long, hard road that requires a commitment of time as well as human and financial resources. But, in the end, you're likely to find the journey worthwhile and the rewards well worth the effort. To look at it another way, IS0 9000 certification could mean nothing less than the future viability of your company.
The growing cry for quality assurance from scrap consumers could make it essential for recyclers to achieve ISO 9000 certification. Here’s a look at how—and why—to apply these international quality standards to your operations.